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Bank Failures Shine Light on Interest Rate Risks
Financial markets reacted turbulently to the collapse of Silicon Valley Bank (SVB) on March 10, 2023, followed two days later by the failure of Signature Bank of New York. With $209 billion in assets and $175 billion in deposits, SVB was the nation’s 16th largest bank and the second largest to fail

Frayed, but Resilient
Over the past 3 weeks the economy and the banking system have become more frayed, yet markets have remained resilient. So, this week, we attempt to make sense out of what doesn’t make any sense.
Our recession call remains in place as many economic indicators point toward a recession. Here are a few:

      • Leading Indicators: The Leading

Who’s Swimming Naked?
Most of the talk this week was of the SVB failure, bank runs, and most important… who’s next? We think that’s the wrong question. Last week we called the SVB failure an old-fashioned bank run, which it was. Much like the movie ”It’s a Wonderful Life”, depositors were lining up at SVB’s internet doors to pull their

The First Law of Holes
The first law of holes is “When you are in one, stop digging”. This is precisely what Congress has been unable to do for many years, no matter which party has been in power. The first step to an eventual solution is acceptance that the Federal debt level is a very real problem. Putting aside

False Ceiling
There has already been plenty of banter in the news about the debt ceiling and with the Treasury Department’s extraordinary measures running out sometime this summer; this is an issue that isn’t going away any time soon. Most of the concern is that Congress will be unable to reach a deal to increase the debt ceiling, but we

The Apollo 13 Problem
In Jim Lovell’s book, Apollo 13, he describes one of the final hurdles the crew faced as they attempted to return their crippled spacecraft to earth. The crew had to approach Earth’s atmosphere at an angle no shallower than 5.3 degrees, and no steeper than 7.7 degrees. If re-entry was shallower than 5.3 degrees, the command

Why Your Kids Can’t Afford a House
Home affordability is a function of two primary things: 1) the ability to save enough for a down payment; and 2) having the income required to service the mortgage each month. With housing costs making up the largest part of family expenses, it would naturally be expected that there would be a close

Stop. Take a Deep Breath.
The last few weeks have been amazing to watch, even for old investment pros. The narrative which over the course of 2022 had gone in our direction (recession), first flipped to a soft-landing scenario (slow growth, but no recession), then flipped to a ‘no-landing’ scenario (i.e., economic growth continues). Finally, as the week came to

The Red Zone
For those that are not football fans, the red zone is the area inside the 20 yard line, where the team is close to scoring a touchdown. When the red zone is reached, the defense is defending a much smaller area on the field, which presents a greater challenge for the offense. It is incumbent on the